Correlation Between Steel Dynamics and Gncc Capital
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Gncc Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Steel Dynamics and Gncc Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Gncc Capital, you can compare the effects of market volatilities on Steel Dynamics and Gncc Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Steel Dynamics with a short position of Gncc Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Gncc Capital.
Diversification Opportunities for Steel Dynamics and Gncc Capital
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and Gncc is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Gncc Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gncc Capital and Steel Dynamics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Steel Dynamics are associated (or correlated) with Gncc Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gncc Capital has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Gncc Capital go up and down completely randomly.
Pair Corralation between Steel Dynamics and Gncc Capital
If you would invest 13,034 in Steel Dynamics on August 25, 2024 and sell it today you would earn a total of 1,323 from holding Steel Dynamics or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Steel Dynamics vs. Gncc Capital
Performance |
| Timeline |
| Steel Dynamics |
| Gncc Capital |
Steel Dynamics and Gncc Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Gncc Capital
The main advantage of trading using opposite Steel Dynamics and Gncc Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Gncc Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gncc Capital will offset losses from the drop in Gncc Capital's long position.The idea behind Steel Dynamics and Gncc Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gncc Capital vs. Mining Global | Gncc Capital vs. New World Gold | Gncc Capital vs. American International Ventures | Gncc Capital vs. Rackla Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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